Bankruptcy marketing is a marketing niche oriented towards bankruptcy professionals and companies. Via bankruptcy marketing, lenders increase their chances of reaching their target customers.
Bankruptcy Marketing: Overall Context
The current economy certainly plays an important role in the thriving bankruptcy marketing industry.
Many small and medium businesses have filed for bankruptcy since the beginning of the crisis. Their owners’ credit score has been dramatically affected, since a client cannot file for a new bankruptcy for six years, counting from the date of their discharge. As bankrupt debtors, they aren’t able to obtain easy access to credit; since they have a bankruptcy claim on file, they won’t gain favor with conventional lenders.
This is where bankruptcy marketing companies find an opportunity to grow their business.
What Do Bankruptcy Marketing Companies Do?
The records concerning bankruptcy claims are available for public consultation. Bankruptcy marketing firms take advantage of such records. They collect bankrupt debtors data, such as addresses, income and bankruptcy claim status. Then they sort and categorize the information in order to generate bankruptcy marketing lists.
The next step they take is to sell the compiled bankruptcy marketing lists to interested parties, most notably non-traditional lenders. These are financial institutions which are willing to face the risks involved in making credit options available to bankrupt debtors.
Bankruptcy Marketing: Who Can Benefit from It?
The bankruptcy marketing industry suits the needs of two distinct yet complementary groups:
- Non-conventional lenders: These firms typically face stiff competition. In order to survive, they need to acquire new bankruptcy marketing lists on a regular basis. This will ensure that they will have access to a constant flow of new potential customers.
- Bankrupt individuals and/or business owners: Before they manage to reestablish a positive credit history, bankrupt debtors must deal with scarce lending options, thus being unable to purchase on credit. Bankruptcy marketing helps them learn about the financing alternatives they can make use of.
Why Is Bankruptcy Marketing Beneficial?
Bankruptcy marketing is beneficial because it makes it possible for non-traditional lenders and bankrupted debtors to meet each other.
The lenders can expand their client base and reach their desired consumers, based on their respective financial profiles. The prospective clients, in turn, can get access to alternative financial services that would be unavailable to them otherwise. Therefore, this is an advantageous situation for both parties: the company or bankruptcy professional who made use of bankruptcy marketing to find a client, and the client who needs that company’s lending services.
Bankruptcy Marketing: Cautions
Since bankruptcy marketing is not a risk-free activity, it is necessary that both lenders and consumers take some measures in order to protect themselves.
Non-traditional lenders who make use of bankruptcy marketing to find new customers must be cautious when hiring bankruptcy marketing firms or purchasing bankrupt lists. It is essential that all the collected data is accurate and up-to-date.
Bankrupt debtors should never accept the credit offers they receive before analyzing all the risks involved. Unfortunately, there are cheats inside the bankruptcy marketing industry. This is something bankrupt individuals must keep in mind no matter how strong their need for credit is.